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(Reuters) -Uber Technologies Inc on Wednesday reported its second quarterly operating profit as demand for its ride-hailing service approached pre-pandemic levels and its food delivery business turned profitable for the first time.
Shares were up nearly 6% in after-hours trading.
The company’s first-quarter outlook fell short of Wall Street expectations as the Omicron coronavirus variant dampens travel, but Uber (NYSE:UBER) Chief Executive Dara Khosrowshahi said business had started picking up into February.
“While the Omicron variant began to impact our business in late December, mobility is already starting to bounce back, with gross bookings up 25% month-on-month in the most recent week,” Khosrowshahi said in a statement.
Uber’s earnings release came shortly before the company’s first-ever investor day, to be held on Thursday in New York. Executives on Wednesday said they would provide more details on their long-term strategy and how Uber could expand its current business.
For the fourth quarter of 2021, Uber reported $5.8 billion in revenue.
The California-based company reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs, primarily stock-based compensation, of $86 million for the quarter ended Dec. 31, significantly ahead of analyst expectations for $62 million.
That compared with a loss on the same basis of $454 million a year ago. It marked the company’s second profitable quarter since it first reported positive adjusted EBITDA in the third quarter.
Uber’s delivery unit, largely made up of its Uber Eats restaurant service, posted its first adjusted EBITDA profit of $25 million, showing Uber’s ability to scale the once loss-making operation against strong competition.
Steady delivery bookings signal that the rebound in rides has not come at the expense of food delivery, with consumers sticking to the service even as the economy reopens.
Uber executives told investors on a conference call that the company was increasingly able to gain new customers for its Eats platform through its ride-hail business since the company merged its services into one app.
“The diversification is really coming into play,” Khosrowshahi said, adding that its business remained resilient even during the Omicron wave thanks to delivery orders.
Khosrowshahi said the company had to improve its restaurant base in the U.S. suburbs to catch up with larger delivery rival DoorDash.
Rides recovery in the fourth quarter was driven by strong demand for airport trips, which tripled compared to last year. Airport rides are among the most profitable routes for Uber.
Uber also posted net income of $892 million, as it revalued its stakes in Southeast-Asian Grab and self-driving company Aurora Innovation Inc, just a quarter after it reported a $2.42 billion net loss driven by its stake in Chinese ride service Didi and stock-based compensation.
The company significantly increased its marketing spend in the fourth quarter, upping sales and marketing expenses by 36% on a quarterly basis. Uber launched several large Uber Eats advertising campaigns in the U.S. market at the end of last year.
Uber forecast lower-than-expected adjusted profit in the first three months of 2022, as the Omicron coronavirus variant dampened travel demand in January. Smaller U.S. rival Lyft Inc (NASDAQ:LYFT) issued a similar warning on Tuesday.
Uber forecast first-quarter adjusted EBITDA to be between $100 million and $130 million, compared with analysts’ estimates for nearly $150 million.
